Cuba news roundup

We’ll be back with a full-service Brief next week.

In the meantime, this week, in Cuba news…

U.S.-Cuba Relations

U.S. sent record $3.4 billion in remittances to Cuba in 2016, but growth slows

Cubans on the island received over $3.4 billion in remittances from the U.S. in 2016, up from $3.3 billion in 2015, according to a report from the Miami-based Havana Consulting Group (HCG), EFE reports; however, the 2.7 percent increase represents the lowest rate of growth in any of the last eight years.

The report found that the increase was due to an upsurge in Cuban migration to the U.S. in 2016, as well as the expansion of flights to Cuba, which led to lower travel costs and, in turn, allowed more Cuban Americans to travel to the island to physically deliver remittances.

Despite the increase, the HCG study suggested that an expected decrease in migration will correlate with a similar decrease in the amount of remittances sent in future years. The U.S. Coast Guard intercepted a record 5,213 Cuban migrants at sea in FY2016, but announced in May it had interdicted fewer than 100 Cuban migrants at sea in the first four months of 2017, including none in April, the first such occurrence in seven years, as the Wall Street Journal reported at the time; Coast Guard Commandant Admiral Paul Zukunft attributed the decline to the rescindment of the “wet foot, dry foot” policy by the Obama administration in January.

In 2009, the Obama administration eliminated restrictions on remittances sent from Cuban Americans to Cuba, and in September 2015, the administration removed all limits on remittances to the island, with the exception of transactions with certain prohibited government officials. The Cuba policy memorandum released by the Trump administration does not impose restrictions on remittances, although it does expand the definition of prohibited officials with whom transactions cannot be made.

Cuba’s chief U.S. negotiator reassigned

Josefina Vidal, the former director of North American affairs at Cuba’s Ministry of Foreign Relations (MINREX) and a key figure in negotiations with the U.S. that led to the December 17, 2014 announcement that the two countries would seek to normalize relations, has been named Cuba’s ambassador to Canada, the Associated Press reports.

Ms. Vidal had served in the position, which does not have a set term length, since 2006. Gustavo Machin Gómez, deputy chief of North American affairs at MINREX, will also leave his post, having been named ambassador to Spain.

Two weeks ago, the Miami Herald reported that former Deputy Chief of Mission Scott Hamilton is now serving as chargé d’affaires ad interim of the U.S. Embassy in Havana, after the conclusion of former chargé d’affaires Ambassador Jeffrey DeLaurentis’ three-year term as head of the post. The Trump administration has not indicated its intention to name an ambassador to the embassy.

Editor’s note: Per President Trump’s National Security Memorandum on Cuba policy, relevant agencies began the process of drafting new regulations on July 16. You can find the Cuba Central Team’s comprehensive overview of what we do and don’t know about the President’s Cuba policy at this link.

Cuban entrepreneurs go to Washington

Yesterday marked the second anniversary of the U.S. and Cuba restoring diplomatic relations. Though the weather in D.C. closely resembled that of July 20, 2015—those who were present that day at the Cuban Embassy’s flag-raising ceremony will vividly recall the sweltering heat—we find ourselves in a very different policy environment.

On June 16, President Trump announced he would unravel significant pieces of the previous administration’s Cuba policy, including the March 2016 provision allowing Americans to travel to Cuba as individuals. He stated that his impending policy changes will “support the Cuban people.”

This week, together with partner organizations Engage Cuba and Cuba Educational Travel, CDA brought a delegation of eight Cuban entrepreneurs to Washington. The delegation shared their views on President Trump’s plans to further limit travel to and trade with Cuba, and they shared how the U.S. can support them, their families, and their businesses.

The entrepreneurs brought an urgent message. As Yamina Vicente, owner of the party planning and decorations business Decorazón put it this week to a roomful of Members of Congress, “If you want to help us, don’t roll back the advances in U.S.-Cuba engagement.”

This week, Yamina, and seven other Cuban entrepreneurs from sectors ranging from hospitality to media, delivered their message to the Departments of State, Treasury, and Commerce. You can read the entrepreneurs’ letter here.

The group also met with Members of Congress from both sides of the aisle. On Tuesday, they held a press conference with Senators Patrick Leahy, Jeff Flake, and Amy Klobuchar, publicly releasing their recommendations for how U.S. policy could truly support them. You can read their full policy recommendations here.

Celia Mendoza, owner of Concierge Habana, which plans VIP tours of the island and works with private restaurants, taxi services, and bed and breakfasts, explained the stakes of President Trump’s plans to prohibit individual travel. Since President Trump’s policy announcement a month ago, “I have received nine cancellations.” U.S. travelers, she said, have started canceling trips out of fear that their travel may no longer be legal, though the regulations to implement the policy have not yet been released. Celia’s business, like many others, depends almost entirely on U.S. clientele, and she made plans based on the expectation that engagement would continue.

Entrepreneurs like her who built their businesses from the ground up “have overcome a lot of obstacles,” she said. “But this is one obstacle that I don’t see that we are going to be able to overcome.”

Julia de la Rosa, who runs the bed and breakfast La Rosa de Ortega, employs 17 people and hosts a clientele that’s about 75 percent U.S. visitors. Over the last two-and-a-half years, she said, restored diplomatic relations between the U.S. and Cuba and engagement with increasing numbers of U.S. travelers had brought her and many other entrepreneurs not only business success but “more confidence in the market.” But Julia is worried that this will all fall away.

Yamina, who left her post as a professor of economics at the University of Havana in 2013 to found her business, said that while her clientele is mostly Cubans who live on the island, “my business, like so many others, depends on the success of the businesses whose clientele is U.S. visitors—depends on them and their employees being successful so that my business can be successful. Whatever affects those businesses affects businesses like mine, too.”

Julio Álvarez, co-owner of the classic car repair shop and chauffeur service NostalgiCar, asked the following of the policymakers and reporters he spoke with: “If you really want to help us, please encourage people to travel to Cuba—we need their support.” At the end of the delegation, Julio told us, “It means a lot to us to be able to help keep the doors open between the U.S. and Cuba, to be able to help our businesses as well as our communities.”

It means a lot to us, too. As President Trump puts the details on his new policy toward Cuba, we hope that he takes the voices of these entrepreneurs into account.

You can check out some of the press coverage of the entrepreneurs’ visit in the Miami Herald and OnCuba Magazine (in Spanish), and take a look at our Facebook and Twitter accounts for the updates we posted throughout the week.

URGENT APPEAL – Preserve engagement with Cuba! Click HERE to support CDA’s advocacy work!

This week, in Cuba news…

Cuentapropismo en Cuba

Yamina Vicente, a former professor of economics at the University of Havana who now owns a party planning and decorations business in Cuba called Decorazón, is this week’s featured contributor to the Cuba Central News Brief. Yamina will join other Cuban entrepreneurs next week in meetings with U.S. policymakers, recommending ways for U.S. policy to support the Cuban private sector. In 2013, Yamina traveled to Washington to participate in CDA’s conference on Cuba’s new economy, and in December 2016, she was one of more than 100 signatories on a letter from Cuban entrepreneurs to then-President-elect Donald Trump urging him to continue building U.S.-Cuba ties.

Para leer este ensayo en español, haga click aquí.

Just a few decades ago, Cuba’s private sector was nonexistent. Entrepreneurship had been all but forgotten. Some years back, as a result of the economic crisis of the 1990s, Cuba’s government began to revive a number of self-employment activities that relieved the Cuban economy by generating employment and income sources for the population. However, this space remained concentrated in just a few types of businesses until the last decade, when the range of legalized activities was expanded to include 211 types of business licenses. Consequently, today we have private taxi drivers, stores, beauty salons, restaurants, gyms, designers, event planners, and more.

This change, which some may consider trivial, inspired hopes and dreams. Many young Cubans whose first choice would have been emigration could now choose family projects within Cuba. The growth of this sector expanded creativity and aesthetics, revived the internal economy, built small chains and productive linkages among cuentapropistas (entrepreneurs), produced community and sustainable development projects, and diversified options for both domestic and foreign clients. Many of the small privately owned businesses served as stimuli for state-run centers. The benefits of the establishment of the private sector in Cuba are innumerable.

Many of the successful businesses in the country are directly tied to the reestablishment of U.S.-Cuba relations. The growth of U.S. travel, and the improvement of telecommunications that this process brought with it, have stimulated the development of the incipient private sector.

Today, there are nearly half a million self-employed workers in Cuba, with significant female representation – people who decided to risk what little they had in pursuit of a dream. A major portion of the clientele for large restaurants, galleries, and homes for rent are Americans. A reversal of achievements in relations would be disastrous for them. But they would not be the only ones affected; the businesses that are directed toward domestic clients would also feel a negative impact, though indirectly. Many of the clients who commonly look to buy these products or services are family members of cuentapropistas, and reducing their income would lessen demand. Without a doubt, having less liquidity in the general population would affect small businesses in general.

For the Cuban cuentapropistas and their families who depend on their businesses, a reversal of U.S. policy toward Cuba would not only represent a “stop,” but a “step backward” in the work they dreamed of, and with much effort, built, for their children.

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URGENT APPEAL – Preserve engagement with Cuba! Click HERE to support CDA’s advocacy work!

This week, in Cuba news…

Support for the Cuban People

Earlier this week, in the spirit of summertime backyard barbecues, NPR ran a story about Cuban charcoal.

It’s a remarkable tale about ingenuity and small but meaningful advances to connect our two countries. In short, Cuban farmers took an invasive weed – one that ransacks huge swaths of Cuban farmland – and turned it into a marketable good: clean-burning artisanal charcoal. Because the product is produced by worker-owned cooperatives in Cuba, 2016 U.S. regulatory changes permit its export to the U.S. The first shipment arrived in January 2017, and U.S. customers can purchase it online at a price of $42.95 for a 33-pound bag.

Other tales of ingenuity on the island abound.

A self-taught seamstress in Havana recently told us her story of small-business survival. When a change in Cuban law prohibited imports of foreign-produced garments for resale, she resolved to save her business by teaching herself how to sew. Only she didn’t have a sewing machine, and purchasing one from a store was cost-prohibitive. She went door to door in her neighborhood and the surrounding communities until she procured a used one. Now, she has two employees, and sells baby clothes to a Cuban clientele who, when they have extra money on hand, can afford to buy them.

Another example of small-business success: The Miami Herald reported on Julia de la Rosa, who, together with her husband, turned a mansion in disrepair on the outskirts of Havana into a popular bed-and-breakfast. Thanks to two decades of hard work – from renovating rooms to finding new parts for the swimming-pool filter – Julia now employs 17 people and hosts a clientele that’s about 75 percent U.S. visitors. She also works with other self-employed Cubans, known as cuentapropistas. “Cuentapropistas have created a network,” Julia told the Miami Herald. “We regularly seek out each other’s services to solve our problems.”

And another: One restaurateur we know, unable to find spices in Cuban markets, buys them in Miami and brings them back in her suitcase to share with Havana’s culinary community. By day, she teaches classes for up-and-coming Cuban chefs. By night, she feeds an ever-growing number of customers at her restaurant, 85 percent of whom are U.S. visitors.

These are snapshots of hard-working, creative, collaborative Cuban entrepreneurs whose businesses are flourishing, thanks in large part to engagement with the U.S. over the last several years.

In the days and moments before and after President Trump’s June 16 Cuba policy speech, Florida Senator Marco Rubio tweeted his view on forthcoming regulatory changes. He would likely know what the changes entail, as it has been widely reported he is the principal architect of the new policy. One tweet in particular stated that individual travel, soon to be prohibited under the “people-to-people” category will still be permitted for those travelers under the “support for the Cuban people” category.

In the Treasury Department’s eyes, support for the Cuban people has a narrow definition: “activities of recognized human rights organizations; independent organizations designed to promote a rapid, peaceful transition to democracy; and individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba.”

What of the majority of Cubans who do not participate in organized activities to this end?

The Cuban people with whom we’ve spoken – many of whom are entrepreneurs – tell us that the best way to support them is through more avenues for personal and commercial engagement with the U.S.

Julia reports she will likely have to scale back expansion plans for her B&B. The restaurateur told us after President Trump’s policy announcement last month, she’s worried that her customer base is about to shrink. They and many others in Cuba’s private sector planned their businesses around a future with more U.S.-Cuba engagement.

As the administration puts the details on the policies announced by President Trump on June 16, we urge it to do so in a way that truly supports the Cuban people.

URGENT APPEAL – Preserve engagement with Cuba! Click HERE to support CDA’s advocacy work!

This week, in Cuba news…